Representative survey results have shown a stable approval rate for implementing unconditional basic income of between 45 and 52 percent in Germany since 2016/17. In European comparison, this approval rate is low. Younger, better educated persons, and those at risk of poverty support the concept of unconditional basic income in Germany. But these demographics are not the only factors that correlate with attitudes toward unconditional basic income: subjective justice attitudes do as well. The justice norm of equity and unconditional basic income appear to be contradictory. On the other hand, people who find that there are deficits in covering the needs of society’s lower income groups tend to approve of unconditional basic income. Therefore, analyses show that attitudes toward unconditional basic income follow specific patterns and social regularities; and they were relatively stable between 2016 and 2018. As long as uncertainty predominates regarding the social costs and benefits of implementing such a basic income, the relatively high proportion of those in favor must be interpreted with care. It does not indicate that society is actually ready for reforms in this direction.

Germany’s leading economics research institutes have revised their forecasts for economic growth in 2019 signifi­cantly downward. They expect Germany’s gross domestic product to increase by 0.8%. This is more than one percentage point less than in autumn 2018, when the forecast was still for 1.9% growth. In contrast, the institutes confirm their previous forecast for the year 2020: gross domestic product is expected to increase by 1.8%. These are the results of the Joint Economic Forecast for spring 2019, which will be presented in Berlin on Thursday.

The total number of dependent employees in Germany has increased by more than four million since the financial crisis. Part of this growth took place in the low-wage sector. Analyses based on data from the Socio-Economic Panel, which in 2017 for the first time include detailed information on secondary employment, show that there were around nine million low-wage employment contracts in Germany that year, around one quarter of all contracts. Women, young adults and employees in Eastern Germany are particularly likely to receive low wages. The legal minimum wage introduced in 2015 is below the low-wage threshold, and thus did not decrease the proportion of low-wage employees, although wages at the bottom-end of the distribution did markedly increase. Wage mobility has hardly changed since the mid-1990s: almost two thirds of employees in the lowest wage category were still there three years later. In order to curtail the low-wage sector, a better and broader qualification of workers, as well as a more proactive wage policy are called for. A reform of the mini-job rules would also be helpful.

The ecological tax reform that Germany implemented between 1999 and 2003 increased energy tax rates—especially on gasoline and diesel. Today, the ecological tax hikes yield an annual revenue of around 20 billion euros or 0.6 percent of GDP. The money is used to finance a higher federal grant to the public pension scheme. Calculations based on a pension simulation model show that the contribution rate to the statutory pension fund is currently 1.2 percentage points lower and pensions 1.5 percent higher than they would be without the currently higher federal subsidies. A microsimulation analysis found that overall, the ecological tax reform is neutral with regard to revenue and burden. For various income groups and social groups, there are certain levels of burden and relief. For example, the reform relieves middle-income households of employees and retired persons who benefit from the public pension scheme. Households with low incomes are actually burdened, as are commuters with long commutes. These distribution effects should be taken into account in a further development of ecological taxes.

Paid and unpaid work are still distributed very unequally between men and women in Germany. Regardless of time restrictions imposed by gainful employment, there is a gender- specific gap in time spent on housework and child care (gender care gap). The total volume of paid and unpaid work on weekdays is roughly the same for men and women (approx. 11 hours), although women perform more unpaid and men more paid work. Also on Sundays, women spend an average of 1.5 hours more on unpaid work, even though almost no gainful work is done—neither by women nor men. In households with children—especially, young children—the gender care gap is particularly wide. Since the unequal distribution of paid and unpaid work negatively affects the financial situation of women, policy measures which support women’s participation in the labor market and encourage men’s participation in housework and child care are important. An example of the latter would be the extension of partner months for the parental
leave benefit.

The gender pay gap of 21 percent in Germany is partly due to the fact that men and women work in different occupations. However, considerable pay gaps between men and women can also be observed within occupations, although the gap is not constant across occupations. In particular, there is a substantial gender pay gap in occupations with non-linear earnings, i.e. earnings increase non-linearly with the number of hours worked. Additionally, occupations which have a high share of leadership positions exhibit a larger gender pay gap. Occupations at public companies tend to have smaller pay gaps. Changes in the organization of work that allow more flexible working hours and top-sharing (dividing a management position into two part-time positions) could help reducing the gender pay gap. Moreover, collective agreements, which usually apply to public sector employers, could also lead to a reduction in the pay gap.

We thank Felicitas and Daniel for their excellent work last year and look forward to a continued great collaboration with the new representatives.

The two Student Representatives serve as spokespersons for the doctoral students. They facilitate communication between the GC staff and the students, as well as organize student events.

Every doctoral student is entitled to nominate and vote for two candidates, with elections held once a year.

The aim of the Commission is to describe the economic, labor market, social and demographic conditions for integration and to propose standards for improving them.

Italy has yet to recover from the economic consequences of the financial and sovereign debt crisis that began more than a decade ago. In addition to losing 1.4 million jobs across the manufacturing and construction sectors, new industries driving growth across the EU, such as knowledge-intensive services, are instead stagnating in Italy. Previous structural reforms focused on deregulating the labor markets and on restructuring the state budget. Other framework conditions, such as an efficient innovation system or substantial R&D investments, were ignored. Going forward, governmental reforms should focus on creating such growth-friendly conditions for businesses in future-oriented industries. Our own calculations show that increased government spending within the amount provided in the latest draft budget can, in principle, have a positive short-term effect on value added, thus mitigating the adjustment costs of pending reforms. Unfortunately, the current government’s plans barely fulfill these criteria.

The Summer School will be held from 9th to 13th September 2019 at DIW Berlin.

Objectives

The main objective of the School is to provide Economics PhD students with high-level academic training on the micro-economic foundations of energy and climate policy instruments. The School is also aimed at supporting the development of a PhD-student network for students interested in the topic, and connect them with top academics in the field.

Deadline to apply: 30th April 2019 APPLY HERE

Instructors and topics

• Carmen Arguedas (Universidad Autónoma de Madrid): “Monitoring and enforcement of energy and climate policies”
• Simone Borghesi (EUI-Florence School of Regulation): “Economic Foundations and modeling of Emission Trading Systems”
• Natalia Fabra (Universidad Carlos III de Madrid): “Competition and market design issues in electricity markets”
• Andreas Lange (University of Hamburg): “Behavioral economics of climate and energy policies”
• Karsten Neuhoff (DIW Berlin, Technical University Berlin): “The theoretical foundation of a policy mix”

Format and regulations of the school

• The format of the school will be seven half-day sessions of teaching by prominent academics plus two half-day sessions with policy makers.
• The teaching will be of a ‘learning by doing’ style based on instructors’ papers that are considered frontier in the field, where students can see applications of methodologies/models that they have previously learned.
• Accepted applicants will be sent papers in advance for preparation for the School.
• Accepted applicants will be required to write and hand in a research proposal after the School.
• For the evaluation of the proposals there will be a matching between students and instructors (based on preferences). The instructor to which the student is matched reads, gives feedback and marks the research proposal (pass/fail). A late hand in of the proposal will correspond to a fail.
• Attendance to the School will be certified (pass/fail). Applicants are invited to check with the course organizer at their institution if they can get credit for their course work.
• Incomplete or late applications will not be considered.
• Accepted applicants must attend the School for its entire duration.
• Accepted applicants must be proficient in English.

Important dates

• 30th April 2019: Deadline for applications
• 15th May 2019: Acceptance notifications
• 1st August: Papers are sent in preparation for the School
• 9th – 13th September 2019: Summer School
• 15th October 2019: Deadline for research proposals

Application instructions

The Summer School is targeted to PhD students in Economics. Selection will be based on a motivation letter and CV.
Mandatory documents (to be uploaded as a single pdf file) are:

• curriculum vitae
• a motivation letter (max 1 page)

Costs

The School will be free of charge for students but accommodation, food and travel is not covered.

For further information please contact Olga Chiappinelli, Department Climate Policy, DIW Berlin at efecp@diw.de

The Dean of the Graduate Center, Prof. Weizsäcker congratulates Björn on his success!

We congratulate Stefan on his success and wish him all the best for his future career!

Debt is the driving force behind investment, economic growth and prosperity: without the indebted­ness of private households, companies and governments, there are no interest-bearing investments in which savers can invest. Real interest rates are generated by productive investments in the real economy. The current low interest rates point to insufficient investment activity and a surplus of savings. On the other hand, the global financial crisis was a crisis of over-indebtedness resulting from unproductive investments in non-valuable financial instruments. Over-indebted banks had to reduce their debts, reorganise themselves or had to be rescued by the state. Countries that borrowed on the international capital markets had to pay higher interest rates, fell into a crisis and received new debt through "rescue packages". At the same time, debt ceilings represent an obstacle to overcoming crises through credit-financed investments. Similarly at the level of private households: on the one hand, they need loans for productive participation in economic life and for business start-ups; on the other hand, consumers with lower incomes or liquidity are vulnerable to over-indebtedness. In order to avoid insolvency, they often have to accept rescheduling loans or revolving loans with expensive residual debt insurance policies that further increase their debt burden. In this context, the question arises to what extent consumers are affected by irresponsible or usurious lending and what regulatory measures are necessary to prevent this. Market failures in credit markets, whether due to usury, exclusion of customer groups or speculative exuberance in the pricing of bonds, can be corrected by government intervention in order to increase welfare.

This issue of the Quarterly Journal of Economic Research deals with the economic and social effects of debt and its appropriate regula­tion. Central questions can be among others:

• Economic and social effects of private sector debt (households, non-financial and financial enterprises) and public sector debt
• Development of global debt
• Is there an optimal level of indebtedness and if so, why?
• Do debts have to be limited and what effects do debt brakes have? Should the state behave like a "Swabian housewife"?
• Market failures in credit markets and opportunities for correction: Usury, market power, rationing, exclusion, discrimination, speculative exuberance
• Influence of private debt (households and enterprises) on investment and consumption
• Link between debt growth, asset prices and financial stability
• Link between public debt and economic growth
• Debt sustainability of households, enterprises and governments
• Over-indebtedness: causes, problems and possible solutions
• Responsible vs. usurious lending
• Transaction lending vs. relationship lending, role of long-term credit relationships
• Debt of banks compared to non-financial corporations, regulation of bank debt
• Effects of debt relief and debt restructuring
• Monetary policy and national debt, debt of central banks
• Impact of the low interest rate environment and unconventional monetary policy on the debt and debt sustainability of the public and private sector
• Economic Thought History of Debt, Modern Monetary Theory
• Economic history: origination of money by debts, credit cycles

Theoretical and empirical contributions are welcome. Political implications of the analyses should be presented and discussed. Position papers from associations, politics and business can also be submitted.

Authors wishing to submit a contribution (German or English) are asked to submit an abstract (maximum 1 page) to Peter Hennecke, Doris Neuberger & Dorothea Schäfer by March 15, 2019 (peter.hennecke@fom-net.de,doris.neuberger@uni-rostock.de, dschaefer@diw.de). Authors will receive feedback on whether the proposal is accepted no later than April 1, 2019. Final contributions should not exceed 30,000 characters and have to be submitted by September 1, 2019. Final contributions will be subject to copyediting and a review process. The issue is scheduled to be published by the end of 2019.

Editors: Peter Hennecke, Doris Neuberger and Dorothea Schäfer